USD/CAD Forecast: Canadian dollar rally continues as U.S-China talks renew optimism

Kenny Fisher MarketPulse

The Canadian dollar started the week with strong gains, as the rally continues. In the Tuesday session, the pair is trading at 1.3293, down 0.04% on the day. It’s a quiet day on the release front – Canada will post trade balance and the U.S publishes JOLTS Job Openings. USD/CAD has now posted losses for four straight days, losing 2.4% in that period.

The U.S. dollar was broadly lower on Monday, as fallout from Fed Chair Powell’s recent remarks continues to weigh on the greenback. Powell engaged in some damage control, seeking to reassure the financial markets that was listening to market concerns about continuing to tighten policy. The markets had given Powell a thumbs-down after the Fed’s December rate statement was on the hawkish side, and stocks plummeted. Powell was dovish in his remarks, saying that he was aware of the risks of a slowdown in the U.S. economy and that the Fed would be patient in its policy decisions.

Risk appetite is higher, as investors are pinning hopes on the outcome of this week’s meeting between U.S and Chinese officials. The teams are holding two days of talks, in an effort to reduce global trade tensions. The ongoing trade war has rocked equity markets, which had their worst year in 2018 since the 2008 financial crisis. The world’s two largest economies have engaged in tit-for-tat tariffs, and President Trump has threatened to impose additional tariffs on March 1 if the sides don’t reach a deal. If this set of talks points to progress, traders can expect risk appetite to improve, which would be bullish for the Canadian dollar.

The Powell “Put” continues to resonate

A bit of the feel-good factor has temporarily abated

USD/CAD Fundamentals

6:00 US NFIB Small Business Index. Estimate 103.1
8:30 Canadian Trade Balance. Estimate -1.9B
10:00 US JOLTS Job Openings. Estimate 7.07M
15:00 US Consumer Credit. Estimate 17.3B
14:00 US FOMC Meeting Minutes

Open: 1.3298 High: 1.3303 Low: 1.3268 Close: 1.3294

USD/CAD Technical

S3	S2	S1	R1	R2	R3
1.3125	1.3200	1.3290	1.3383	1.3461	1.3552

USD/CAD edged higher in the Asian session and is flat in European trade

1.3290 was tested earlier in support. It is a weak line
1.3383 is the next resistance line
Current range: 1.3290 to 1.3383

Further levels in both directions:

Below: 1.3290, 1.3200 and 1.3125
Above: 1.3383, 1.3461, 1.3552 and 1.3696

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold buyers hesitate amid holiday-thinned trading

Gold trades volatile, but within range, as US, China holidays-led thin trading exaggerates moves. The US Dollar extends range play into the US GDP week, with markets pricing at least two Fed rate cuts this year. Technically, Gold tests key support at $5,000; daily RSI still remains bullish.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.